Is ARM a buy ?

$ARM, a undisputed leader in the CPU industry, as they took their monumental step into the public sphere through an exciting #IPO.

Let's delve into $ARM 🚀 Potentials and ⚖️ Challenges - in this comprehensive thread.

$ARM is the industry leader of CPUs. They architect, develop, and license high performance, low-cost, and energy-efficient #CPU products and related technology, on which many of the world’s leading #semiconductor companies and #OEMs rely on them to develop their products.

 🎯$𝑨𝑹𝑴 𝐅𝐨𝐮𝐧𝐝𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐎𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐂𝐡𝐚𝐧𝐠𝐞𝐬

👉 Founded in 1990 as a joint venture between Acorn Computers, $APPL, and VLSI Technology.

👉Listed on the London Stock Exchange and Nasdaq from 1998 to 2016.

👉Acquired by #SoftBank for $32 billion in 2016.

👉 In September 2020, $NVDA announced a $40 billion acquisition of Arm.

👉Regulatory challenges, including a lawsuit by the #FTC , led to the Nvidia deal's cancellation.

👉Went public through #IPO with $51 per share and market cap $54.5B USD on 14th Sep 2023.

👉 $ARM #China operates independently from $ARM. $ARM has only 4.8% indirect ownership interest(non-voting) in Arm China. $ARM China is the largest customer of $ARM.🚩

🎯 $𝑨𝑹𝑴 𝑮𝒍𝒐𝒃𝒂𝒍 𝑹𝒆𝒂𝒄𝒉

👉70% of the world's population uses $ARM based products. 🚀

👉99% of #Smartphones run on $ARM based processors.🚀

👉All key #mobile operating systems depend upon $ARM processors.🚀

👉50% of all chips with #processors are $ARM based.🚀

👉Over 250 billion $ARM based chips shipped to date.

👉Chips containing $ARM technology representing an approximate 48.9% market share in the calendar year ended December 31, 2022 🚀

👉30 billion $ARM based chips shipped in the fiscal year ended March 31, 2023 🚀

🎯$𝑨𝑹𝑴 𝑪𝒍𝒊𝒆𝒏𝒕 𝑩𝒂𝒔𝒆

👉Clients include $AAPL, #Samsung , $AMZN, $NVDA and #GOOG etc.🚀

👉Diverse client base and 10% market share in cloud computing as of December 31, 2022.🚀

👉More than 260 companies reported that they had shipped Arm-based chips in the fiscal year ended March 31, 2023, including the largest technology companies globally (such as $AMZN and $GOOG), major #semiconductor chip vendors (such as $AMD, $INTL, $NVDA, $QCOM & #Samsung)🚀🚀

🎯$𝑨𝑹𝑴 𝑩𝒖𝒔𝒊𝒏𝒆𝒔𝒔 𝑴𝒐𝒅𝒆𝒍

👉 $ARM licenses processor designs to semiconductor companies and OEMs.🚀

👉 Licensees pay upfront fees and royalties based on chip sales.🚀

👉 Designs suitable for various applications and can generate royalties for over 25 years.🚀

🎯$𝑨𝑹𝑴 𝑭𝒊𝒏𝒂𝒏𝒄𝒊𝒂𝒍 𝑷𝒆𝒓𝒇𝒐𝒓𝒎𝒂𝒏𝒄𝒆

👉Solid gross profit margin of 96% and Operating income margin of 25% in the fiscal yr 2023.🚀

👉On June 30, 2023, $ARM has cash and cash equivalents of approximately $1.2B billion and short-term investments of $801 million.🚀

👉For the fiscal year 2023, total revenue was relatively flat at $2.6B , as compared to $2.7B in the fiscal year 2022. $ARM's revenue was impacted by weak mobile demand as per them.🚩

👉For last Q, revenue and income is down as compared to the same period of last year.🚩

👉Top five customers (including $ARM China) collectively accounted for approximately 57% revenue.🚩

👉Largest customer $ARM #China , accounted for approximately 24% revenue. 🚩

🎯$𝑨𝑹𝑴 𝑺𝒕𝒓𝒂𝒕𝒆𝒈𝒊𝒄 𝑮𝒐𝒂𝒍𝒔 𝒂𝒏𝒅 𝑶𝒑𝒑𝒐𝒓𝒕𝒖𝒏𝒊𝒕𝒊𝒆𝒔

👉TAM is expected to grow at a 6.8% #CAGR to approximately $246.6B by 2025.🚀

👉Expanding in areas like #smartphones, consumer #electronics, and #embedded computing.

👉Increasing royalty revenue by providing value added technology.🚀

👉Expecting Arm market share of cloud compute to grow significantly faster than the overall cloud compute market.🚀

👉Establishing leadership in emerging tech sectors like #edgecomputing and #IOT etc (#ADAS AR)🚀

🎯 $𝑨𝑹𝑴 𝑪𝒉𝒂𝒍𝒍𝒆𝒏𝒈𝒆𝒔 𝒂𝒏𝒅 𝑪𝒐𝒎𝒑𝒍𝒆𝒙 𝑹𝒆𝒍𝒂𝒕𝒊𝒐𝒏𝒔𝒉𝒊𝒑 𝒘𝒊𝒕𝒉 $ARM #𝑪𝒉𝒊𝒏𝒂

👉 $ARM China operates independently from Arm.

👉 $ARM holds only an indirect 4.8% interest in Arm China through a 10% stake in an intermediate entity called #Acetone Ltd🚩

👉 $ARM China contributed 24.5% of Arm's $2.68B revenue in fiscal 2023🚩

👉Late payments and "significant risks" associated with Arm China's business have posed challenges for Arm🚩

👉U.S. sanctions and rising competition in China raise concerns for China's long term prospects.🚩

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https://drive.google.com/file/d/1t9fFuGUpDstauCF_Yu5VWas7_UbJHc0N/view?usp=sharing

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